Corporate Scandal Threatens National Security

There is a scandal unfolding in corporate America that President Bush needs to stop, given that fixing Social Security is his top domestic goal and securing the nation against terrorism is his greatest duty.

The scandal is happening precisely where Social Security and national security intersect.

The question it raises: Is the administration tolerating an increased risk of terrorism because it doesn’t want to stop big businesses from hiring illegal aliens?

Key facts of this scandal were revealed in an October report from the Inspector General of the Social Security Administration (SSA). The report examines the records of the 100 companies that filed the most W-2 reports from 1997-2001 on which the names and/or Social Security Numbers did not match SSA records and that SSA–even after some investigation–could not credit to a known taxpayer.

SSA consigns these orphaned W-2s to what it calls the Earnings Suspense File (ESF). The “Top 100″ worst filers of W-2s that ended up in the ESF, the inspector general discovered, collectively filed more than 2.7 million of these bad W-2s over the five years studied, reporting about $9.6 billion in wages that could not be matched to a worker.

The report does not name these “Top 100″ companies. But it provides some details about them. For, example:

The No. 1 corporate filer of orphaned W-2s is based in Illinois. From 1997-2001, it filed 131,991 of these W-2s, reporting $524,933,538 in wages that the government could not credit to a known taxpayer.

A Texas company was No. 2. It filed 108,302 orphaned W-2s over five years, reporting $532,964,026 in wages paid to unknown workers.

The problem got worse. “Our review of the Top 100 employer data also found that the average increase in suspended wage items between TYs 1997 and 2001 was approximately 69%,” said the report.

Now, this is an obvious scandal for Social Security. Workers with higher reported wages get bigger benefit checks in retirement. But as long as the $9.6 billion in wages reported by the “Top 100″ companies on bad W-2s remains unmatched to any taxpayer, the taxpayers who earned those wages and paid taxes on them may be denied their full Social Security benefits.

These workers–provided they were legally entitled to work in the U.S.–are getting ripped off.

Even if national security were not involved, that alone should cause President Bush to act.

But testifying before the Senate Intelligence Committee in February, Deputy Homeland Security Secretary James Loy said al Qaeda leaders have considered infiltrating terrorists across the Mexican border because they “believe illegal entry is more advantageous than legal entry for operational security reasons.”

Illegal aliens sneaking into the U.S. to commit terrorism need the same criminal services as illegal aliens sneaking into the U.S. to work. Mass illegal immigration–and corporations that encourage it by hiring masses of illegal aliens–have created an inland sea of lawlessness in which terrorist sharks can readily swim.

In fact, on June 25, 2002, following an SSA examination of the identities used by the September 11, 2001, hijackers, then-SSA Inspector General James G. Huse, Jr. told the House Subcommittee on Crime that the hijackers used, among others, five counterfeit SSNs and one belonging to a child.

“Because a terrorist, to be effective, must first be assimilated into American society, and because an SSN is a critical tool in the assimilation, it became apparent that the acquisition of an SSN was indispensable,” said Huse.

On Sept. 19, 2002, Huse told the House Immigration Subcommittee: “Protecting the integrity of that identifier [the Social Security Number] is as important to our homeland security as any border patrol or airport screening.”

Before September 11, we had little warning. Now we’ve had plenty.

To make terrorist sharks easier to spot and capture, the government must drain their habitat–and it can start by pulling the plug on a policy that looks the other way when businesses hire illegal aliens.

Huse told the Immigration Subcommittee: “Our reviews of the suspended wages in the ESF suggest that illegal work is the primary cause of suspended wages.”

If illegal work is the “primary cause” W-2s end up in the ESF, isn’t it reasonable to suspect that companies filing large numbers of these W-2s may be hiring large numbers of illegal workers?

House Judiciary Chairman James Sensenbrenner told me last month the Department of Homeland Security should investigate these companies to find out if that is the case.